We’ve Never Been Here Before

In trying to gauge the coronavirus crisis, we are all struggling for historical reference points. Which is the historical example to choose?

The turmoil in the financial markets and the talk of bailouts reminds us of 2008. But though the shock comes at the end of a long economic upswing, it is not organically related to that long period of growth. Some overstretched businesses are getting their comeuppance, no doubt. But even the airlines, the firms everyone loves to hate, are not to blame.

It isn’t a black swan event, either. A pandemic risk was well-mapped by experts. We just chose to ignore them, all of us. And now we are making an unprecedented public policy choice to shut down the economy.

So, is it like a war? References to World War II encourage feelings of patriotic mobilization. But mobilization is precisely not our goal. Nonessential sectors would be furloughed in a war effort, too, but their workers and plants would likely be rapidly reallocated to war duty. If covid-19 were the kind of disease that required a broad-front medical mobilization, the military analogy might work better. After all, in 2020, health care, at 18 percent, already accounts for a far larger share of the U.S. economy than defense did at the time of Pearl Harbor.